Summaries of health policy coverage from major news organizations

‘Rate-Setting’ Would Worsen Physician Group Insolvency, Times Says

While doctors are "not entirely wrong to blame penny-pinching health plans" for the near-bankruptcy of over half of California's physician-managed medical practices, they "are attempting a cure that is worse than the disease," a Los Angeles Times editorial states. The California Medical Association is supporting a "radical" bill (AB 1600) by Assembly member Fred Keeley (D-Boulder Creek), which would "effectively put government in the medical rate-setting business" by giving doctors antitrust exemptions "so they could band together to demand arbitration when they didn't like their contracts." The editorial states that the bill would "accelerate the rising cost of health care for both individuals and employers." The bill's "fatal flaw," the editorial states, is a provision allowing an arbitrator to establish physician compensation rates "in isolation from the market pressures that make managed care plans affordable."

The editorial states that the Department of Managed Health Care would be the "only state authority that could conceivably do the job," but the department has said it "doesn't want to get into the rate-setting business." Consequently, the doctors have suggested that arbitration panels could be run by retired judges, but the editorial says that "rent-a-judges" have "no experience in medical economics." Instead, the editorial suggests that DMHC "aggressively" implement Sen. Jack Scott's (D-Altadena) bill (AB 1455) -- passed last year and soon to take effect -- which requires the department to "identify and prevent 'unfair payment patterns' such as denying claims for payments related to medically necessary care or for previously authorized treatment." The editorial concludes that Scott's bill "will in the long run serve doctors, patients and HMOs far more effectively than rate-setting" (Los Angeles Times, 4/20).

This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.